Allied Minds' John Serafini: From Airborne Ranger to Venture Creator
You might not be familiar with Allied Minds, because it takes a different approach than a typical venture capital firm. It funds and helps build companies from scratch by identifying intellectual property out of universities and federal labs. In addition to the capital to fund the business, Allied Minds also takes executive leadership roles in the company, runnng the day-to-day operations.
Allied Minds has over 20 companies part of its portfolio across technology and life sciences industries.
Keith Cline: Tell me about your background.
John Serafini: I grew up outside of Boston and - with the exception of my time in the military - I’ve been blessed to have lived here all of my life. I attended West Point and looking back nearly 20 years later, I think I was motivated by a combination of wanting to challenge/test myself, a desire to serve our nation, and an opportunity to play college hockey. Being a bit of a counter-culturist in the midst of an engineering school, I chose to major in English where I had the chance to study art, philosophy and literature. It was truly an amazing academic experience.
KC: What did you do after graduation?
JS: At graduation, along with my other West Point classmates, I was honored to receive a commission in the U.S. Army as a Second Lieutenant. In all, I spent six years as an Airborne Ranger qualified infantry officer, privileged to lead the amazing soldiers of our military with my time split between the 82nd Airborne Division at Fort Bragg and the United Nations Joint Security Area inside the Korean Demilitarized Zone.
KC: Why did you decide to continue your studies at Harvard Business School (MBA) and Harvard John F. Kennedy School of Government (Masters in International Security Policy and Political Economy)?
JS: Coming out of the military in 2004, I frankly didn’t know the difference between an M-16 and a balance sheet, so getting a business education was a priority. And while HBS was an excellent experience and a helpful transition out of the military, I wanted more… and a joint MBA/MPA degree with the Kennedy School provided the forum to explore topics of real passion to me such as national security policy, role of technology in the common defense, and poverty analysis. I wouldn’t trade my three years at Harvard for any other educational experience and the people I had the privilege to meet remain amongst my closest friends and mentors.
KC: What brought you to Allied Minds to pursue a career in venture capital?
JS: What I love about Allied Minds - and what makes us so different from the typical Series A or Series B round venture capital investor - is the chance to build companies from scratch. A true throwback to the earliest days of venture capital. We start with pure intellectual property that we’ve found in our nation’s best federal labs and universities and from that initial building block we create an investment hypothesis that eventually leads to a business plan, core team, and a first product - normally all achieved with our seed round funding. After that, we continue to scale our companies as subsidiaries to Allied Minds, providing additional capital, governance and active management to our portfolio of companies.
KC: Can you share more about Allied Minds' focus and how you differentiate yourself from other VC firms?
JS: The vast majority of VCs make minority investments in existing companies and may or may not play a corporate governance role in the company’s development post investment. For us, it’s basically the opposite. We found the company, we operate the company, we fund the company, we scale the company. Think of us as a combination of venture capitalist, founder, CEO, lawyer, investment banker and growth equity investor all in one publicly traded entity. Yes - we are certainly unique!
KC: What companies are currently in your portfolio?
JS: I’ve been blessed to work with some of our nations’ best inventors and CEOs in creating our subsidiary companies. Some of our more mature portfolio companies include: Federated Wireless, which is developing technology to allow sharing of unlicensed radio frequencies – including unused military spectrum – to ease the growing problem of spectrum scarcity for mobile broadband. HawkEye 360 is building and launching a constellation of small satellites to collect data on wireless signals that can be used to track global transportation networks and assist with emergencies. Whitewood Encryption is developing next-generation quantum cryptography technologies, including its quantum-powered random number generator. And Percipient Networks was formed based on malware protection technology developed at a major government research laboratory and licensed by Allied Minds through an exclusive partnership with MITRE.
KC: What stage of investments do you primarily target?
JS: All of our companies at Allied Minds have been built from the ground up by Allied Minds and we actively participate in our companies’ funding rounds - from seed to self-sufficiency.
KC: What are the top traits you look for in terms of investing into a company or founder?
JS: We have been fortunate to work with so many great founding scientists - individuals from federal labs such as MITRE and the Aerospace Corporation and universities such as Virginia Tech and Harvard. The common themes that we look for are an entrepreneurial spirit, appreciation for the start-up development process, and willingness to work with a dedicated management team specially built to commercialize that founder’s intellectual property.
A shining example of an Allied Minds founding scientist is Dr. Charles Clancy, who runs the Hume Center for National Security and Technology at Virginia Tech. Clancy and Allied Minds have teamed together to build three great new companies in fields of cyber security, spectrum sharing, and RF data analytics.
KC: What sectors of technology, industries, or trends are of interest to you?
JS: For me specifically, I focus on examining technologies that originate from our nation’s federal laboratories such as Department of Defense and Department of Energy labs, Federally Funded Research and Development Centers, and government agencies and which we believe to have excellent dual-use capabilities (i.e. supports not just a federal mission, but also addresses large commercial markets as well).
Accordingly, my investment interests center upon those capabilities most likely to originate from federal research dollars - cyber security, unmanned systems, wireless communications, space technologies, robotics, and artificial intelligence are all of interest to us at Allied Minds. Allied Minds also focuses on venture creation within the life science sector, with phenomenal access to universities across the U.S. But my attention is focused predominately on physical sciences technologies.
KC: What is the current fund that you are investing from?
JS: As a publicly traded holding company, Allied Minds is not a fund. We raise capital from our shareholders that gets deployed through the parent entity into our subsidiary companies. In that respect, Allied Minds can be thought of as an evergreen investment vehicle. Additionally, as our subsidiary companies mature and are ready for larger sums of capital, we provide our shareholders with the opportunity to invest directly into the companies.
For our investors, this structure provides two bites at the apple - they hold liquid stock in the publicly traded parent and have the opportunity to invest in the subsidiaries of most interest to them. To date, we have raised approximately $600M.
KC: What excites you about the current market in Boston?
JS: We have here in Boston such phenomenal centers of research and development - both university and federal labs - such as Harvard, MIT, MITRE, Draper, MIT Lincoln Lab, BU, and WPI. These institutions provide great opportunities to us at Allied Minds to build exciting new Allied Minds companies from the building blocks of Boston-originated intellectual property. A perfect example is our company Percipient Networks, which is commercializing a ground breaking network security as a service capability called Strongarm - IP we licensed from MITRE following years of federal funding and development.
KC: Who do you admire or who has been the greatest mentor for you?
JS: Richard Clarke, the former security advisor to multiple Presidential administrations, has been a great friend, boss, and mentor to me over the years since we first met at the Kennedy School. Without my wife, Daniele, I’d be lost - she’s my closest friend and I admire her greatly for her ability to work a full time job, juggle three kids, volunteer in the community, and still find a way to put up with me!
KC: Outside of being a VC, what are your personal interests or activities?
JS: My wife and I have three children - our oldest son, Jack, is seven, our daughter Vivienne is four, and Teddy, our youngest, is 13 months old. When I’m not working, I try to spend as much time with my family as possible. My favorite family activity is coaching my son’s little league baseball team! Otherwise, I love running marathons and mountain climbing, but finding several weeks to go tackle a big mountain is getting harder and harder (if not impossible).
John Serafini with two of his children, Jack and Vivienne.
KC: What are you currently reading? What type of music do you like?
JS: I’m working my way through Absolute Monarchs: A History of the Papacy. At my current pace, I should be done sometime in the year 2020…
For music, my favorites are Bob Dylan, Grateful Dead, and Mumford & Sons. Although, if I’m listening to the radio, its likely sports talk shows.
KC: Are you involved in any charitable organizations?
JS: Yes, I’m a Trustee at the Judge Baker Children’s Center, a nearly 100-year-old Harvard affiliate here in Boston focused upon children’s mental health needs. I’m also proud to serve as the Chairman of my West Point Class’ Memorial Scholarship Fund and I’ll be co-chairing the Milton Academy Annual Fund this year.